What Is a Development Finance?

Development finance is a type of secured lending that provides funding for property projects that involve construction or significant refurbishment. It is tailored for property developers and investors who need a flexible, staged-release funding solution to bring their developments to completion.

Unlike traditional mortgages, development finance is based on the projected value of the completed development — also known as the Gross Development Value (GDV) — rather than just the purchase price.

What Can Development Finance Be Used For?

Property development loans are highly versatile and can be used for a range of projects, including:

• Ground-up new builds – single homes, multiple units, or commercial developments.

• Property conversions – such as turning a commercial building into residential flats.

• Major refurbishments – including structural changes and extensions.

• Part-completed projects – to finish developments where previous funding has fallen through.

• Land acquisition with planning permission – funding can be used to secure development-ready sites.

Whether you're an experienced developer or looking to finance your first project, development finance offers the flexibility to support a wide range of property investment strategies.

Typical Terms/Structure

Development finance loans are structured to align with the timeline of the project. Key features typically include:

• Loan terms: 6 to 24 months (sometimes up to 36 months for larger projects)

• Loan size: From £100,000 to £50 million+, depending on the project size

• Loan-to-cost (LTC): Up to 85% of total development costs

• Loan-to-GDV (LTGDV): Up to 70-75% of the gross development value

• Interest: Typically rolled up and paid at the end of the term (no monthly payments)

• Drawdown: Funds released in tranches, linked to build stages and verified by surveyor

Who Is Eligible for Development Finance?

Lenders will assess applications based on:

• The strength of the development proposal

• Experience of the developer or development team

• Planning permissions and legal documentation

• Exit strategy (e.g. sale or long-term refinance)

• Project location and market demand

While experienced developers have an advantage, some lenders offer finance to first-time developers if the project is supported by a strong professional team (e.g., architect, project manager, builder).

Why Use Property Development Finance?

Property development finance offers several advantages:

• Fast access to capital – ideal for competitive land acquisitions

• Staged funding – reduces interest costs as funds are only drawn when needed

• Increased project scale – leverage finance to take on larger or multiple developments

• Specialist support – lenders often offer expert insights and connections to help de-risk your project

Need Help Securing Development Finance?

Whether you're planning your first development or managing a large-scale project, securing the right property development finance is crucial to success. We work with a panel of specialist lenders to find competitive, tailored solutions that match your project’s timeline, budget, and goals.

Contact us today for expert advice and a no-obligation quote.